Sellstate Achievers Realty Network
Condition characterized by illnesses indicative of reduced immune responsiveness in otherwise healthy individuals. Viral organisms dubbed HTLVIII (for human T lymphotrophic virus type III) and LAV (for lymphadenopathy associated virus), respectively, are the putative causative agents of this destruction of bodily defenses. Together, these viral organisms have become known as human immunodeficiency virus (HIV). The HIV infection is the initial event in the course of a disease that culminates in AIDS in some of its victims. HIV is a member of the class of RNA viruses known as retro-viruses, identifiable by their use of the enzyme reverse transcriptase. This enzyme permits retroviruses to replicate their own genetic information, utilizing mammalian host cell DNA to produce the new viral RNA necessary for the assembly of new organisms. Reverse transcriptase also allows the virus to incorporate its genetic material into that of the host. In this manner the virus may immortalize itself by lying dormant within the host genome while remaining capable of producing new viral organisms at a future time. HIV infection begins with viral penetration of lymphocytes and monocytes, the white blood cells involved in immune defense. The first phase of the infection frequently causes an illness with symptoms similar to those produced by infectious mononucleosis. After days or weeks of mild illness, some patients appear to recover. In the others, the viral destruction of host cells continues unabated with the virus infecting other tissues, including cells in the brain. After a latent phase, which varies with age, degree of immune responsiveness, and the number of viral particles producing the initial infection, the patient begins to manifest signs and symptoms of immune system damage. These late sequelae of HIV infection include unexplained fevers, lymph node enlargement, persistent infections with fungi or viruses, and unexplained weight loss. When these symptoms fulfill specific criteria, they are referred to as the AIDS-related complex, or ARC. Only the patients who develop the most severe immune system damage, resulting in infections such as Pneumocystis carinii pneumonia (PCP) or unusual cancers like Kaposi's sarcoma, are classified as having AIDS. The direct impact of the AIDS virus is and will be felt by both the property and casualty insurance and the life and health insurance branches. Property and Casualty Insurance
From a property and casualty insurance perspective, the AIDS issue could impact the liability sections of the homeowners insurance policy, automobile insurance policies (both personal and business), commercial general liability (CGL) policy, and workers compensation policy:
Life and Health Insurance
- HOMEOWNERS INSURANCE POLICY. The INSURANCE SERVICES OFFICE (ISO) homeowners insurance policy form has a communicable disease endorsement EXCLUSION. Most property and casualty companies use this form either in total or with minor modification. Since this exclusion to date has not been subject to an adverse ruling by a court of law, it may be that the homeowners policy does not have an AIDS EXPOSURE.
- AUTOMOBILE INSURANCE policies (both personal and business). An AIDS exposure could result (these policies do not have a communicable disease endorsement exclusion) because of negligent acts and/or omissions of a driver resulting in: (a) an injured party contracting AIDS through a blood transfusion necessitated by an accident and then bringing suit against the driver, who is found negligent under the TORT LIABILITY system. In a similar circumstance, an injured party's open wound comes into contact with an open wound of another injured party whohas AIDS, with an ensuing suit against the negligent driver. Certainly, the wounds would not have come into contact if the accident had not occurred. (b) the activation of a previously dormant AIDS virus (as discussed above, the virus may "immortalize" itself by lying dormantwithin the host genome while remaining capable of producing new viral organisms at a future time) in an injured party, with the injured party bringing suit against the driver whose acts and/or omissions are deemed to be negligent by a court of law. Had the catalyst accident not occurred, the AIDS virus would have remained dormant.
- COMMERCIAL GENERAL LIABILITY (CGL) form. An AIDS exposure may arise because of negligent acts of employees or circumstancesoccurring on a business' property: (a) An AIDS exposure could result in the event that an AIDS-infected employee contaminates a product and/or service being provided to a customer or fellow employee, and the customer or fellow employee brings suit against the business. For example,the infected employee may have a cut finger and drops of his or her blood may accidentally become mixed with the food being consumed by a customer or fellow employee. Or the infected employee could intentionally contaminate the food with his or her body fluid as a vengeful act. (b) An AIDS exposure could result in the event that a sexual assault by an AIDS-infected assailant (regardless of whether or not the assailant is an employee) is incurred by a customer while visiting the premises of the business and the injured customer brings suit against the business. It is the responsibility of the business to render its premises safe for the invited customer. The Connie Francis case is the precedent sexual assault case for this exposure. A similar circumstance could result if an AIDS-infected assailant assaults an employee. (c) An AIDS exposure could result in the event that a business fails to maintain the confidentiality of an AIDS-infected employee's personnel file and the employee brings suit against the business for the tort acts of libel, slander, and invasion of privacy.
- WORKERS COMPENSATION policy. An AIDS exposure could result if an employee injured at work receives a blood transfusion from a fellow employee who has AIDS. Is the transmission of AIDS in this manner a job-related injury, thus qualifying the injured employee for benefits under workers compensation? Certainly the injured employee would not have required the blood transfusion had the injury not occurred at work.In another situation, two or more employees may be injured in a common accident, resulting in open wounds of various employees coming into contact. If at least one of the injured employees is a carrier of the AIDS virus, several employees could become infected. The AIDS virus is most likely to be spread as the result of close contact with blood, blood products, or semen from an infected person. Is this scenario not a classic case for a workers compensation claim?
In each of the two preceding examples, assume that the employer was aware of the AIDS condition of the employee(s) prior to the accident and kept this information confidential so as not to invade the privacy of the employee(s). In this instance, could not the newly AIDS-infected employee (s) seek damages for benefits against the employer beyond that provided by workers compensation? Certainly the employer was aware of an inherently potentially dangerous situation in the workplace and took no actions to alleviate the situation or render it harmless. Is not a similar circumstance the basis for the employer tort cases for job-related injuries resulting from exposure to asbestos?
AIDS-related deaths could have a significant impact on the LIFE INSURANCE and HEALTH INSURANCE industries as these deaths affect thenormal claims pattern for GROUP LIFE INSURANCE and INDIVIDUAL LIFE INSURANCE:
Some life insurance policies have POLICY PURCHASE OPTIONS (PPO), whereby the insured can automatically increase the limits of coverage when certain events occur, such as every fifth policy anniversary. The AIDS patient then could automatically increase his or her coverage over various periods of time. Also, for dividend paying policies the AIDS patient could use the dividends to automatically purchase paid-up additions to his or her policy without having to take a physical or answer any medical-related questions (in essence, this is GUARANTEED INSURABILITY). Once again, the insurer has no control over these events or distributions. For life insurance policies already in existence, AIDS-related questions were not asked on the APPLICATION. Thus, many companies have huge blocks of business that may be susceptible to the effects of the AIDS epidemic.
- Group Life, Medical, and Disability Insurance. If the insurance policy is a true group policy, all applicants must be accepted during theopen enrollment period. Thus a person who has AIDS would automatically be insured. If, however, there are a significant number of claims under the group policy, the insurance company can reflect this adverse experience in next year's premium rates. The insurance company also has the option of not renewing the group's coverage. There is also a limit on the DEATH BENEFIT available under group policies. For example, employee group life policies limit the coverage per employee to a multiple (usually twice) of the employee's annual salary. This limitation reduces somewhat the ADVERSE SELECTION associated with the AIDS-infected employee opting for higher limits of coverage.
- Individual Life, Medical, and Disability Insurance. In underwriting individual coverages (unlike group insurance, where the factors of age, sex, and industry classification only are considered) numerous factors are evaluated, to include age, sex, personal health record, family health, occupation, vocation, hobbies, habits such as chemical abuse, life-style, and so forth. These factors undergo close scrutiny, especially when the higher limits of coverage are applied for. However, after the applicant becomes an INSURED, he or she could contact AIDS, an eventuality that was not included in the PREMIUM rate. Individual life insurance contracts (ordinary policies and even term insurance, which can be renewed and converted at the option of the insured) are contracts for life. Thus, once the insurer accepts the applicant for coverage, the insurer is at the mercy of any future AIDS epidemic.